Music Broadcast Limited (RADIOCITY) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Music Broadcast Limited Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Please note, this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to the CEO of the company, Mr. Abraham Thomas. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and a very warm welcome to the quarter 3 earnings conference call of Music Broadcast Limited. Joining me on the call today is Mr. Rajiv Shah, our Chief Financial Officer. During the quarter, the company continued to execute on the strategic realignment initiatives announced earlier, aimed at strengthening profitability, optimizing costs and improving operational efficiency. These actions are now beginning to reflect in our financial performance, particularly on margins and bottom line improvement. As highlighted in the previous quarter, we undertook several decisive measures across manpower, programming and digital initiatives. The benefits of these actions were more visible during quarter 3 with prudent cost controls and better operating leverage. Our focus remains firmly on cost discipline, efficient content delivery and improving monetization across platforms. Most importantly, these initiatives do not compromise operational efficiency or market presence while positioning the company for sustainable profitability. The financial performance for Q3 FY '26, the financial highlights are for Q3 FY '26, the company reported revenue of INR 46.4 crores, reflecting a 23% quarter-on-quarter growth driven by improved advertiser activity and seasonal momentum. Total income stood at INR 54.8 crores. On the profitability front, Operating EBITDA for the quarter was INR 15.9 crores compared to INR 1.3 crores in quarter 2 FY '26, demonstrating a significant improvement in operating performance. EBITDA margins expanded to 34%, reflecting the impact of cost rationalization and operating leverage. Operating EBITDA stood at INR 9.1 crores with EBIT margins improving to 20%. After accounting for finance costs and taxes, the adjusted profit after tax after interest on NCRPS stood at INR 6 crores compared to a loss in the previous quarter. Reported PAT for the quarter was INR 4.1 crores, making a strong sequential turnaround. The 9-month performance of the company ended December 2025, total income stood at INR 155.8 crores. EBITDA was INR 25.3 crores. While year-on-year numbers remain impacted due to softer advertising environment, the sequential trend reflects a clear improvement in business momentum and profitability. The advertising environment during the quarter showed gradual recovery, supported by festive demand and improved sentiment across categories. Radio City continues to maintain its strong advertiser relationships and remained a preferred platform for clients seeking effective regional and mass reach. Our continued focus on alternate revenue streams, including branded content, properties, sponsorships and integrated solutions also supports revenue diversification and resilience. Looking ahead, we remain cautiously optimistic. The structural cost actions undertaken, combined with improved advertising demand position us well to sustain margin improvement, drive profitable growth and strengthen cash flows. We will continue to focus on disciplined execution and capital efficiency while navigating near-term uncertainties. With that, I would now request the moderator to open the floor for questions and answers.

[Operator Instructions] We will take our first question from the line of [ K. Maro ] an individual investor.

Okay. My first question is regarding our court issue with Phonographic. And I just want to know about the maximum amount involved. That means the amount in dispute. That means what could be the maximum liability that may occur.

See, the liability is not quantifiable. And as per our stand, we believe there should not be any outflow as per our legal opinion and our case looks to be strong, and we are waiting now for the hearing at the Supreme Court level. We don't see any outflow going.

Okay. So any approx figure?

We cannot quantify this since it's sub-judice and we have a strong case, and we don't see any financial outflow of this.

Okay. And this court case is with reference to the year 2010 and 2020. Am I correct, sir?

Yes.

Okay. So is there any possibility of the same type of a dispute that may occur thereafter, I mean, after 2020?

No. After that, the copyright Board order has been followed and which nobody is disputing.

Got it. Got it, sir. So can I go ahead with another question, sir?

Please go ahead.

I want to know the gross debt as on 31st December, gross debt.

There is no debt on the company's books.

No, I'm talking about not net debt. I'm talking about gross debt.

There is no debt on the company's book. The only debt is the preference shares, which was already redeemed.

Okay. Got it. So now what is the cash position, net cash as on 31st December?

It is INR 373 crores.

Okay. It's a net cash available as on 31st December.

As on 31st December.

[Operator Instructions] The next question is from the line of [ Meghana ] an individual investor. Since there is no response, we'll move on to the next question from the line of Chandramouli Jagannathan, an individual investor.

Now you said that you have a net cash of about INR 373 crores. But you would have redeemed in January the NCRPS about INR 107 crores. So after that, it's still -- I mean, minus thing that it will be roughly about INR 260 crores, you mean to say, right?

Correct. We asked it as on 31st December. So that is the figure as on 31st December. As on today, it is INR 261 crores.

Okay. Okay. And normally, where you just put the interest cost for the NCRPS about INR 2.5 crores, INR 3 crores on a quarterly basis, roughly about INR 11 crores, INR 12 crores on a yearly basis, which will go out from the next -- current quarter, right?

For 1 month, it will be there for January. And after that, there will be no interest on NCRPS.

So that means next year, the interest cost will be negligible overall as a company. Am I right?

Yes, it will be negligible, correct.

Okay. Sir, if that is the case, you know that the company's market cap right now is only about INR 200-plus crores, whereas the company net cash is INR 260 crores in spite of the business is not -- but can you guys normally consider about a buyback, the buyback tax is also kind of attractive after the new budget [indiscernible] as a group..

This, I will not be able to comment right now. The proposal has just come in.

Okay. So what would be -- because in the last quarter, you guys are paying about quarter-on-quarter, the incremental benefit of the cost-cutting measures and things like that will be around INR 6 crores, INR 7 crores. Will it continue? I mean next year will be a good year for music broadcast, if that is the case on the profitability front?

Should be.

So what is the growth that you expect next year, sir?

So it will depend on how the industry behaves. So right now, we are not in a position to give any guidance for the next year.

Okay. It's not on a top line, at least on a bottom line, there will be a decent growth because of all these measures, right?

Yes. There should be -- see, if we say INR 6 crores, we are saving around INR 24 crores on the expenses front and around INR 7 crores on the NCRPS interest. So around INR 30 crores saving in the expense should be there.

Okay. So that will straight away get into a PBT, if I'm right?

Yes.

Okay. Okay, sir. Okay. Please my humble request from our side to consider buyback where the whatever, whatever thing where we can return to our shareholders. So apart from that NCRPS, there is nothing pending, right? It's all over because it got redeemed in January.

Yes, everything is done.

We'll take our next question from the line of [ Rajakumar Vaidyanathan ] from RK Invest.

Sir, first of all, congrats for the better set of numbers for this quarter. So I can see the cost savings that you articulated in the last call is kind of fructified this quarter. Sir, the question is still there is a revenue degrowth there compared to year-on-year. So when do you think that this will get addressed?

So you're right, the advertising market outside is subdued, and there is -- there is also an impact of substantial election political spending last year same quarter due to the assembly elections. So that also has kind of added to the degrowth if you were to compare it to the previous year. So things are slowly getting better. We are expecting things to remain stable going forward.

Okay. So is it fair to assume that you will not lose money on the bottom line going forward given that all the cost initiatives have been baked in?

Yes, that is the attempt. I think these cost cuts are sustainable. We are able to manage the business efficiently without impacting any listener experience or advertiser experience. So the cost cuts are definitely sustainable. So it's about growing the top line, looking at alternate revenue streams going forward.